Posted on: 02-10-12 13:39:06
There has been a lot of speculation about why India's Prime Minister Manmohan Singh pushed through controversial economic reforms recently and risked his government's survival.
Last week, a key ruling coalition ally, the Trinamool Congress party, withdrew support in protest against the government's decision to open the retail sector to global supermarket chains and raise diesel prices.
The government has been reduced to a minority, but its majority in parliament is not at immediate risk as it still has the support of some regional parties.
Many believe Mr Singh's reforms rush is an attempt to refurbish his image and energise his colleagues.
Others say it was to give a forceful answer to his critics in the foreign media, and divert attention from corruption charges against his government.
However, in his address to the nation on 21 September, the prime minister hinted at the real reason why the government opted for these contentious decisions.
If we had not acted, he said, it would have meant "a loss of confidence in our economy".
'Junk status'
What he left unsaid was that this would indeed have happened if the global rating agencies like Standard & Poor's (S&P), had downgraded India's investment status to "junk".
In April S&P threatened that it could downgrade the country's sovereign rating to "below-investment" grade within 24 months.
A "junk status" would have implied a huge crisis on the external front.
In his speech, Mr Singh outlined its contours, saying it would lead to a higher fiscal deficit, and a further steep rise in prices.
He added that in such a situation "both domestic as well as foreign investors would be reluctant to invest in our economy", and Indian companies would not be able to borrow abroad.
Indian Prime Minister Manmohan Singh Mr Singh was the finance minister during the 1991 crisis
The result: dismal economic growth and high unemployment.
Mr Singh said that the last time the country faced this problem was in 1991.
By June 1991, following the Gulf war, soaring global crude prices and domestic political uncertainty, India faced an acute shortage of foreign exchange.
A 2002 International Monetary Fund (IMF) paper, said the foreign reserves were nearly depleted.
With less than a billion dollars, India could finance only a few weeks of imports, and was on the verge of defaulting on its external payment obligations.
Earlier, the country had to airlift 67 tonnes (67000kg) of gold and pledge it overseas to raise crucial foreign exchange.
Only when the Congress Party's Narasimha Rao government came to power in 1991 with Mr Singh as the finance minister, did India devalue its currency, take a huge loan from the IMF, and announced wide-ranging reforms to put her on the right economic track.
This year there were enough signals that the Indian economic situation could return to the 1990-91 days.
'Preventive action'
S&P in its April report, suggested India needed to act immediately to find answers to its economic problems, which included low growth, high inflation, huge debt, a looming fiscal deficit and a lack of reforms.
By May, another rating firm, Fitch, was keeping a close eye on the developments in India.
During its meetings with S&P and Fitch in those months, government officials said that the country's future outlook was not as bad as was painted by these agencies.
They told S&P that several reform measures were in the offing; critical bills pending in parliament would be passed in its monsoon session throughout August and September, and new important bills, including land acquisition, would be introduced.
Attempts were made to convince Fitch that inflows from foreign investors were still robust, signalling there was global optimism about India.
Protestors burn an effigy representing India"s ruling United Progressive Alliance during a nationwide strike in Hyderabad, India, Thursday, Sept. 20, 2012. There have been protests against the reforms
Unfortunately, by the second week of September, both these arguments sounded hollow.
The parliament's monsoon session ended in a deadlock; there was a complete logjam as opposition parties stalled both the houses because of opposition charges against the prime minister in a scandal involving allocation of coalfields to private companies.
In the first quarter of 2012-13 (April-June 2012), gross foreign direct investment (FDI) inflows were more than 50% lower than in the same period in the previous year.
The growing evidence before the government by mid-September was that S&P would have no option but to downgrade India, and much sooner than its two-year deadline.
Only this time, unlike in 1991 when he swallowed the reform pills as per the IMF prescription, the prime minister decided to act on S&P's suggestions, say experts.
In its April report, the rating agency had urged the government to raise diesel prices, cap subsidies on other fuels such as LPG, and remove FDI restrictions in sectors such as multi-brand retail and banking.
Most of these policies were announced by the government in September.
Mr Singh's justification for these measures was that "I know what happened in 1991 and I would be failing in my duty as prime minister of this great country if I did not take strong preventive action".
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mor
Whenever you experience joy, peace, security, equanimity or purity, it is only because you are aligned with ALMIGHTY.
Before 2009 elections, to counter Advani, MMS gave the election promise that he will unearth black money/money stashed in foreign banks within 100 days.
Does he not have any need to act on the same? The corp orates' mouth piece media talks about only the "reforms". This is actually common man paying by blowing his scalp, where earlier he was paying through nose.
1% of the population enjoys 99% of the nation's wealth. They get all the expressways, law and order, protection from the police, paramilitary and military. But they won't pay their legitimate taxes. They would shamelessly have it waived by bribing MMS and Co.
The common man comprising of the poor and the middle class is pushed towards perpetual slavery. Even for the next lunch or dinner and for a loin's cloth he must toil like a slave.
This is what Manmohanomics is all about.
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Quote:
Originally posted by ramar2005
Before 2009 elections, to counter Advani, MMS gave the election promise that he will unearth black money/money stashed in foreign banks within 100 days.
Does he not have any need to act on the same? The corp orates' mouth piece media talks about only the "reforms". This is actually common man paying by blowing his scalp, where earlier he was paying through nose.
1% of the population enjoys 99% of the nation's wealth. They get all the expressways, law and order, protection from the police, paramilitary and military. But they won't pay their legitimate taxes. They would shamelessly have it waived by bribing MMS and Co.
The common man comprising of the poor and the middle class is pushed towards perpetual slavery. Even for the next lunch or dinner and for a loin's cloth he must toil like a slave.
This is what Manmohanomics is all about.
So where do you think is he stashing all the personal gains out of these policies ?
May I convey to you that you are one of those who get easily blind by the things in the air ? You cannot see one issue in its isolation but mix all of them together and would like to view it messy...always !!
Do you know how much food is wasted in current retail process? Do you know the health hazards of fake and fabricated products ? do you know amount of tax erosion by non compliant and ignorant shop owners ? do you know the issue of encroachment due to mom-pop shops ? do you know the corruption in police and hafta gangs due to nukkad bazaars ? do you know the plight of tax paying consumers in the hands of rogue shopkeepers and distributers? Do you know what hoarders and opportunist doing to the country ? Do you know that farmers and cultivators do not get value for their hardwork as there is no big buyer like walmart ? do you know how messy are cities due to shops everywhere ? do you know malls, big retail shops, mega marts and dedicated plazas are the indicators of developments in city, less taxing on city resources such as utilities, water and space ?
Seems like logical thinking is only left to western world , and emotional fools are all left back home. MMS is doing favor to this country despite his corrupt fellow congressmen keep undoing his work. He is not a policeman , he is not a dictator, He is not stern or one who takes a stand against his own, He is not harboring gundas in his security or for next elections, He does'n play by political gimmick that is why called a big Failure but economics is one thing he has tight grip on. So we can forget he is from a corrupt party and remember his merits. Can we not ?
Quote:
Originally posted by san-hugo
Quote:
Originally posted by ramar2005
Before 2009 elections, to counter Advani, MMS gave the election promise that he will unearth black money/money stashed in foreign banks within 100 days.
Does he not have any need to act on the same? The corp orates' mouth piece media talks about only the "reforms". This is actually common man paying by blowing his scalp, where earlier he was paying through nose.
1% of the population enjoys 99% of the nation's wealth. They get all the expressways, law and order, protection from the police, paramilitary and military. But they won't pay their legitimate taxes. They would shamelessly have it waived by bribing MMS and Co.
The common man comprising of the poor and the middle class is pushed towards perpetual slavery. Even for the next lunch or dinner and for a loin's cloth he must toil like a slave.
This is what Manmohanomics is all about.
So where do you think is he stashing all the personal gains out of these policies ?
May I convey to you that you are one of those who get easily blind by the things in the air ? You cannot see one issue in its isolation but mix all of them together and would like to view it messy...always !!
Do you know how much food is wasted in current retail process? Do you know the health hazards of fake and fabricated products ? do you know amount of tax erosion by non compliant and ignorant shop owners ? do you know the issue of encroachment due to mom-pop shops ? do you know the corruption in police and hafta gangs due to nukkad bazaars ? do you know the plight of tax paying consumers in the hands of rogue shopkeepers and distributers? Do you know what hoarders and opportunist doing to the country ? Do you know that farmers and cultivators do not get value for their hardwork as there is no big buyer like walmart ? do you know how messy are cities due to shops everywhere ? do you know malls, big retail shops, mega marts and dedicated plazas are the indicators of developments in city, less taxing on city resources such as utilities, water and space ?
Seems like logical thinking is only left to western world , and emotional fools are all left back home. MMS is doing favor to this country despite his corrupt fellow congressmen keep undoing his work. He is not a policeman , he is not a dictator, He is not stern or one who takes a stand against his own, He is not harboring gundas in his security or for next elections, He does'n play by political gimmick that is why called a big Failure but economics is one thing he has tight grip on. So we can forget he is from a corrupt party and remember his merits. Can we not ?
+1
It is difficult to convince who is sold on MMS fairy tales. The guy who participated in 2G scam and then SC had to cancel all the licenses, is responsible for shaking confidence of foreign investor. The joker of the pack introduced a bill which amends Income tax act retrospectively from 1961. The party to which this joker belongs has ruled India for last 65 years and has inculcated culture of corruption right from police, bureaucracy to judiciary. Now that he has been caught pants down, trying to salvage his image by auctioning future of India. This MMS joker has allowed unrestrained imports from number one enemy China by selling off Iron ore. A test of any country's economic strength is not GDP but trade deficit which has grown under MMS.
Look at the following
Question mark on govt fruit & vegetable wastage figures
Experts and traders argue data are not based on any scientific research or study
http://www.business-standard.com/india/news/question-markgovt-fruitvegetable-wastage-figures/488149/
MMS is absolutely anti- Indian
"Do you know how much food is wasted in current retail process? Do you know the health hazards of fake and fabricated products ? do you know amount of tax erosion by non compliant and ignorant shop owners ? do you know the issue of encroachment due to mom-pop shops ? do you know the corruption in police and hafta gangs due to nukkad bazaars ? do you know the plight of tax paying consumers in the hands of rogue shopkeepers and distributers? Do you know what hoarders and opportunist doing to the country ? Do you know that farmers and cultivators do not get value for their hardwork as there is no big buyer like walmart ? do you know how messy are cities due to shops everywhere ? do you know malls, big retail shops, mega marts and dedicated plazas are the indicators of developments in city, less taxing on city resources such as utilities, water and space ?"
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So you really believe that all the big MNCs are mercifully coming in here to remove all the above bad things that you have spoken.
Or is it for their own profits?
Is MMS & Co. doing all these, to eradicate all the bad things you have spoken about in today's retail?
Or is it for the kickbacks they can possibly receive from these MNCs for themselves and their political parties?
In the light of the Black money,2G, CWG, Adarsh, Coalgate and now the Vadragate scams and the very honest way MMS & Co have handled all these it is only obvious that we are letting in another group of "East India Companies".
We have not learnt from our experience of 300 years of slavery.
MMS & Co are only lending Dubash services to these MNCs
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We can have an idea of what sort of reforms, we are importing, if only what is happening in where from we are importing the same.
Look at the farce and dumb charade, that they call "Presidential debates".
Reference P. Sainath's column "Obama can keep the Change"in The Hindu on Friday, October 5, 2012.
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